Economics Knowledge Test 1

Scale of preference shows.

• A incomes of consumers in order of size

• utilities enjoyed by consumers.

• opportunity cost of goods consumed

• consumers wants in order of priority

There is unemployment of resources when production is

• within the production possibility cure

• outside the production possibility curve

• along the production possibility curve.

• adequate to meet market demand.

A major characteristic of natural resources is that they

• are unlimited in supply.

• have high cost of production.

• are free gifts of nature.

• do not command any price.

A major disadvantage of a capitalist economy is that it

• lead to low production of goods and services

• requires a large number of officials to operate.

• considers individual consumers' satisfaction

• worsens income inequality among the citizens.

The mining sector of an economy contributes 60% to the Gross Domestic Production (GDP). If the GDP is $540, what is the contribution of the mining sector?

• $90.00

• $180.00

• $324.00

• $350.00

The increase in the demand for a commodity may lead to a decrease in the demand for another if both are

• in complementary demand.

• of the same quality.

• in composite demand.

• in competitive demand.

The demand curve for goods of ostentation is usually

• negatively sloped.

• positively sloped.

• vertical.

• horizontal.

Which of the following factors is not a cause of change in demand? Changes in

• taste and fashion

• income distribution

• price of the commodity

• the size of the population

If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is

• 0.50.

• 0.65.

• 2.00.

• 2.50.

The supply curve of a locally produced good may shift to the right if

• there is an increase in taxes on inputs.

• government increases subsidies.

• rural-urban migration is encouraged

• the price of the commodity increases.